Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. pronghorn produces one single product, a small rea

Pronghorn produces one single product, a small reading tablet, and sells it at $100 per unit....

50.1K

Verified Solution

Question

Accounting

Pronghorn produces one single product, a small reading tablet,and sells it at $100 per unit. Its current annual sales are$200,000. Its annual fixed costs include factory rent, $38,000;depreciation expense; equipment, $10,000; utilities, $18,000;insurance, $8,000. Its variable costs include materials, $30 perunit, and direct labour, $40 per unit. Pronghorn’s income tax rateis 20%.

1.What is the contribution margin per unit?

2.What is the contribution margin ratio?

3.How many units must Pronghorn sell to break even?

4.If Pronghorn would like to earn a profit after tax of $11,000,what should the sales be? At this sales level, what is the degreeof operating leverage? What is the margin of safety in unit?

5.If Pronghorn would like to earn a profit after tax that is 8%of sales, what should the sales be? How many units does Pronghornneed to increase from the current sales level?

Answer & Explanation Solved by verified expert
4.2 Ratings (894 Votes)
All working forms part of the answer Requirement 1 Sales price per unit 100 Variable cost per unit Direct Material 30 Direct labor 40 70 Contribution margin per unit 30 Requirement 2 A Contribution margin per unit 30 B Sales price per unit 100 C AB Contribution    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

You have just been appointed the new marketing manager for Bon Voyage, a large travel group....

Operations Management
Q

You have been asked to design a resistance training program for an experienced weight lifter who...

Medical Sciences
Q

Botulism can cause muscle weakness, paralysis and the inability to breath. This is due to...

Biology
Q

aggregate supply curve LRAS for the United States The economy is initially at long run...

Basic Math
Q

For the function f(x) = 3x + 2x - 6, evaluate and fully simplify each...

Basic Math
Q

Suppose that the position of a particle is given by s t 4 t 2...

Calculus
Q

Washing his dad s car alone eight year old Levi takes 2 5 hours If...

Algebra
Q

TOSHIBA, EY (LO 1,2,3) In 2015, the business press reported that Japans Toshiba...

Accounting
Q

Federated Fabrications leased a tooling machine on January 1,2024, for a three-year period ending December...

Accounting
Q

5 points 14. The value of the earnings per share (EPS) for Ronin Company was...

Accounting
Q

Qu ha hecho Amazon para cambiar las expectativas de entrega de los clientes? Multiple Choice...

Accounting
Q

Insurance companies are required to submit uniform financial statements to the regulators. These statements are...

Finance